"FIIs (Foreign Institutional Investors)/QFIs (Qualified Foreign Investors) shall henceforth be permitted to invest only in dated government securities having residual maturity of one year or above," Sebi said in a circular.
Securities and Exchange Board of India added that the "existing FII/QFI investments in Treasury Bills shall be allowed to taper off on maturity/sale".
The regulator also said that "the purchases in Treasury Bills shall be permitted" and "the investment limits vacated at the shorter end would be available at longer maturities".
However, the overall limit for FII/QFI investments in government securities would remain unchanged at USD 30 billion, it said.
The circular by Sebi has been issued pursuant to the announcements made in the first bi-monthly monetary policy statement, 2014-15 on April 1, 2014 by the Reserve Bank.
RBI has been rationalising and expanding limits for foreign investments in debt markets.
Notifying its decision, RBI said: "On a review, to encourage longer term flows, it has now been decided that foreign investment by all eligible investors including RFPIs shall henceforth be permitted only in government dated securities having residual maturity of one year and above."
It said the existing investments in T-bills and government securities of less than one year residual maturity shall be allowed to taper off on maturity or sale.
However, there will be no change in all other existing conditions for investment in government securities, it said.
Registered Foreign Portfolio Investors (RFPIs) is a new umbrella class for foreign institutional investors (FIIs), sub account and qualified foreign investors.